BANGALORE Larsen & Toubro Ltd has sought permission from market regulators to sell its stake in outsourcer Mahindra Satyam Ltd, a spokesman for the engineering and construction major said.
L&T, which operates in industries as diverse as engineering, shipbuilding and software, has sought the permission as an "enabling arrangement" and has not set a timeframe for selling its holding, the spokesman told Reuters on Wednesday.
Mumbai-based L&T had built up a 12 percent stake in Mahindra Satyam, earlier known as Satyam Computer Services Ltd, before the sale of the company, which was rattled by India's biggest corporate fraud.
In April, L&T lost out in the race for a controlling stake in the fraud-hit outsourcer, which was eventually bought by smaller rival Tech Mahindra Ltd -- a unit of India's Mahindra & Mahindra Ltd.
Based on the expanded share capital after Satyam's takeover, L&T's stake in the company is at 6.9 percent, according to Thomson Reuters data. At the current Satyam share price, the holding is worth nearly 9 billion rupees ($190 million).
Under the conditions of the Satyam sale, bidders for the company are barred from selling their stakes, acquired prior to the bid, for six months as they were given access to Satyam's financial information that was not public at that time.
Satyam, which was once India's No. 4 outsourcing firm, had not reported audited results beyond the September quarter after founder Ramalinga Raju shocked investors in January by saying the company's profits had been overstated for years.
In June, Satyam released financial figures for the first time since the revelation of the fraud, ahead of the launch of an open offer by Tech Mahindra.
"We are asking for a concession since the information that were made available to us as a bidder is public now," the L&T spokesman said.
He, however, said that L&T was not planning to sell the stake immediately if the restriction was lifted, but would consider various issues including market conditions before deciding.
At 0657 GMT, shares in Mahindra Satyam was up 4.4 percent at 111.85 rupees and L&T was down 1.5 percent at 1,497.25 rupees in the main Mumbai market that was down 0.6 percent.
(Additional reporting by Ami Shah)
Trending On Reuters
The Reserve Bank of India (RBI) has not said it is done with interest rate cuts and will keep a close eye on incoming data, Governor Raghuram Rajan told CNBC in an interview. Read | RBI more likely to cut rates in Sept - Reuters poll